management consultancy report 1 (togo)

Management Consultancy ReportCorporate Hospitality Entity: Outline and Explanation of the Elements and Relationship Between the Elements of the Strategic Management Process

Stenden Hogeschool Institute Leeuwarden The Netherlands February 2011

Submitted in Partial Fulfilment for the Requirements of the degree Programme Bachelor of Business Administration

Outline and Explanation of the Elements and Relationship Between the Elements of the Strategic Management Process I3SHC

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DECLARATION AGAINST PLAGIARISMAUTHORS NOTES1. This document is constructed by us and does not, in any form, use inappropriate sources without acknowledging the original author. All verbatim extracts have been distinguished by quotation marks and the sources of all information have been specifically acknowledged. This document is written according APA and Harvard Business style, and is, in no way, previously accepted in any application for a degree or diploma by either the original authors of this document, or anyone else.

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SIGNED DECLARATION Signature Date: February 7, 2011

Jacoline de Winter () Althea Hochtritt (83390) Xu Nan () Emma Roodbergen ()


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Table of ContentsChapter 1: Introduction ................................ ................................ ................................ .................... 4 Chapter 2: Definition of Terms ................................ ................................ ................................ ...... 5 Chapter 3: Is strategy a necessary process? ................................ ................................ .............. 6 Chapter 3.1: The strategy process has evolved; explain with reference to the schools of thought on strategic management ................................ ................................ ................................ ...................... 6 Chapter 4: Corporate Governance Chain ................................ ................................ ....................... 7 Chapter 5: The strategic management decision- making processes ................................ .......... 7


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Chapter 1: Introduction In order to understand the multiple business unit: the strategic management decision -making structures and processes, it is important to get an overview of the background of corporations, their importance in an economical context. Subsequently the attention can be directed towads the r structures and decision-making processes in these organizations. According to (Bowen, Lincoln, & Rigby, 2006) the concept of corporation as is known nowadays dates back to 1600, when Queen Elizabeth I granted a charter that incorporated 219 members. This body was later known as the English East India Company. The focus of this incorporation was to fund explorations into far away countries. The author claims that the English East India Company along with the rival Dutch East India Company chartered in 1601 are the most remarkable edifice of commercial capitalism.

However, (Shah, 2002)implies that the popularity and economical importance has greatly evolved, for example of the 100 largest economies in the world, 51 are corporations while only 49 are countries, based on corporate sales and countrys GDP. In addition, the author states that the Top 200 corporations' sales are growing at a faster rate than overall global economic activity. Evidence for this statement is supported by statistical evidence from the period 1983 and 1999; their combined sales grew from the equivalent of 25.0 percent to 27.5 percent of World GDP. Although, the evidence supported ranges from a period of (28-12) years ago, it deems to highlight the growth in economical importance that has been achieved since the inception of this business concept.


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Chapter 2: Definition of Terms CorporationA definition for corporation is offered by (Mancuso, 2008), A corporation, like an LLC, is a statutory creature, created and regulated by state law. The corporate is different from other types of business, because it is a legal and tax entity separate from any of the people who own, control, manage, or operate it .

Governance Chain The governance chain illuminates the roles and relationships of different groups involved in the governance of an organization Definition Corporate LevelThe corporate level concerns the overall purpose of an organization and how value can be added to the different departments of the organization, (Johnson, Scholes, & Whittington, 2008).

Strategic Management ProcessAccording to Coulter (2005) the strategic management process consists of four elements of sequential and interrelated activities leading to some outcome. The author identifies these areas as in the strategic management situational analysis, strategy formulation, strategy implementation, and strategy evaluationresult in a set of strategies the organization uses in doing business.

Company missionThe company mission defines a company. Its an overall goal, which is general stated, not directed and nonspecific, but does tell what the organization stands for. (Business dictionary, HC Strategics)

Company profileA company profile is a short report which provides an overview of the history, current status and future goals of a company, (Business dictionary)

External environment (operating environment)The external environment involves conditions, entities, events and factors surrounding an organization, which can influence the organizations activities and choices, and determines opportunities and risks, (Business dictionary)

Strategic analysisEmployees should analyze a certain situation, before deciding upon a strategic direction. The analysis involves scanning and evaluating the current organizational context, external environment and organizational environment, (Coulter, 2005).

Long-term objectivesOutline and Explanation of the Elements and Relationship Between the Elements of the Strategic Management Process I3SHC

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Long term objectives are often future oriented and are spread over a longer period of time, (Business dictionary, HC strategics)

Chapter 3: Is strategy a necessary process? According to (Goldman 2006) choice effects strategy. The author identifies strategy as an important aspect, which is related to many issues in the business decision making process. The author places strategy in the context of the foundation upon which information patterns and the creation of thinking models evolve, the influence it has on leadership, change management and entrepreneurial issues and subsequently identifies strategy as a s a key driver of growth. Similarly, (Coulter, 2005) provides four reasons for importance of strategy: for the efficiency of the personnel, the organisational overall performance, the nimbleness of a company- being able to react to environmental changes and the strategy design process. Chapter 3.1: The strategy process has evolved; explain with reference to the schools of thought on strategic management According to the authors (Mintzberg, Ahlstrand, & Lampel, 2005)ten varying schools of thought on strategy can be identified. These schools are further sub-divided into three categories, of which the first three are considered prescriptive, i.e. the focus is on prescribing a method of strategy formulation than actually analysing how strategies are formed. The authors claim that this notion of strategic thinking dated to the 1960s and are the foundation upon which the following two categories are built. The subsequent category relates to the descriptive thinking schools and includes the six schools that follow, the focus here is concentrated on actually describing the processes involved in making strategies. The final category consists of one school of thought- the configuration school and can be seen as an integration of all previous schools of thinking. 1. The Design school: strategy formation is a process of conception of finding a fit between the internal capabilities and the opportunities in the external environment. 2. The Planning School: strategy formation process is a formal process of systematic gathering of information of the environment. 3. The Positioning School: strategy formation is analytical and depends on strategic positioning in the economic marketplace. 4. The Entrepreneurial School: strategy formation is based on the visions of the founders 5. The Cognitive School: strategy formation relies on the cognitive capabilities of the strategists. This school of thought sees strategies emerging as perspectives (Willauer, 2005)in the form of concepts, maps, schemes and frames. The author further claims that these strategists extract information from the information in order to find the problems facing an organisation or the solution thereof. 6. The Learning School: strategy formation is an emergent process within the organisation in small steps by learning from past experiences. 7. The Power School: strategies emerge from distributive negotiation processes within an organisation itself or among competing organisations. 8. The Cultural School: strategy formation is based on the organisational culture of the organisation.Outline and Explanation of the Elements and Relationship Between the Elements of the Strategic Management Process I3SHC

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9. The Environmental School: strategy formation is the process of the organisation reacting to its external environment. 10. The Configuration school: Strategy formation is based on integrating elements of the various schools of thought. Chapter 4: Corporate Governance Chain Consistent with the model of (Hill & Jones, 2009) three general levels of strategic management can be identified, namely: the corporate, business and functional levels. This is a hierarchical depiction of the governance chain, whereby the CEO is the overall general manager of the entire organization. Other key members of the corporate level are the CFO (Chief Financial Officer) and the COO (Chief Operations Manager). The CEO along with the other members of the executive staff is responsible for the decision making in the corporation and to oversee the development of the strategy. It is at this level that the research and development activities are formulated and conducted. That means that the environmental scanning, both internal and external and the analysis of the competitive landscape of the multiple business units are contracted at this level of the corporation. Moreover, an assessment of the organizational life cycle, industry drivers, and any relevant contemporary issues are researched and analysed, in order to create projections and formulate goals.

Consequently, the decisions and goals are then communicated to the divisional managers within the business levels. It is at this level that the corporate goals become more specific, i.e. corporate headquarters dictates what needs to be done and the divisional mangers create a plan of attack as how these goals can be achieved. Once this is done, the goals are now transformed into objectives, according to (Johnson, Scholes, & Whittington, 2008) a goal is a general statement of aim or purpose in comparison to an objective that is quantification or more precise statement of the goal. At this stage, one speaks of operational Strategy, because atthis level management is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Therefore, operational strategy main focuses is on issues relating to resources- tangible and intangible and the corresponding processes. Subsequent to the objectification of the corporate goals these are then communicated to the functional level managers, who then are responsible for the execution phase of the predefined objectives.


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Chapter 5: The strategic management decision- making processes

Figure 1

As can be seen in Figure 1the model depicts the strategic management decision-making processes. It can be seen that these processes are directed towards the procedure of fitting the internal capabilities of an organization to the external environment by choosing the best option of all the possible options. This view is aligned to the perception of (Bhushan & Rai, 2004) in their book they make reference to internal- external paradigm. This means that the internal capabilities are fitted to the opportunities and threats present in the external environment. Incidental, the underlying assumption is that the situations present within the internal environment are controllable contrary to the forces present in the external environment. Furthermore, the model displays that the company sets a mission to define its overall goal. Hence, the company mission has a major impact on both the company s profile and the external environment in which the organization operates. This point of view is challenged by (Wheelen & Hunger, 2004), they assert that the initial stage in this process is the environmental scanning, followed by the strategy formulation phase of which precedes with the mission of the company. Another important aspect to be identified in the above-mentioned model is that the results of the company profile and the external analysis have a major impact on the strategic analysis and choice, which in turn has a minor impact on the company profile and the external analysis. Resultant of the previous stage is the long term objectives and grand strategies. Consequently, these elements impact the annual objectives, functional strategies and policies, which are controlled and evaluated. Feedback on these processes is provided at several stages within the process. Subsequently, the results of the control and evaluation also have a major impact on the company profile, external environment and the company mission. Simply put it is the prerogative of a company to align their mission, the results of the strategies impact the external environment in terms of the competitive landscape or being an industry driver.Outline and Explanation of the Elements and Relationship Between the Elements of the Strategic Management Process I3SHC

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ReferencesBhushan, N., & Rai, K. (2004). Strategic Decision Making: Applying the Analytic HierarchyProcess. Springer. Bowen, H., Lincoln, M., & Rigby, N. (2006). The Worls of the East India Company. Coulter, M. (2005). Strategic Management in Action. Pearson. Hill, C., & Jones, G. R. (2009). Strategic Management Theory: An Integrated Approach. Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy. Prentice Hall. Kotler, P., Bowen, J. T., & Makens, J. C. (2006). Marketing for Hospitality and Tourism. Pearson Education. Mancuso, A. (2008). LLC or Corporation? How to Choose the Right Form for Your Business. Mintzberg, H., Ahlstrand, B., & Lampel, J. (2005). Strategy Safari. Free Press. Shah, A. (5. December 2002). http://www.globalissues.org. Abgerufen am 6. February 2011 Wheelen, T., & Hunger, J. D. (2004). Strategic Management and Business Policy. Pearson Education. Willauer, B. (2005). Consensus as key Success Factor in Strategy Making.


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management consultancy report 1 (togo)